Sound View Innovations, LLC v. Hulu, LLC

NOTICE OF MOTION AND MOTION for Summary Judgment of No Willful Infringement

C.D. Cal.March 5, 2019

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) BRETT J. WILLIAMSON (SB # 145235) (bwilliamson@omm.com) JOHN C. KAPPOS (SB # 171977) (jkappos@omm.com) CAMERON W. WESTIN (SB # 290999) (cwestin@omm.com) BO. K. MOON (SB # 268481) (bmoon@omm.com) BRADLEY M. BERG (SB # 300856) (bmberg@omm.com) O’MELVENY & MYERS LLP 610 Newport Center Drive, 17th Floor Newport Beach, California 92660 Telephone: (949) 823-6900 Facsimile: (949) 823-6904 Attorneys for Defendant and Counter-Claimant HULU, LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUND VIEW INNOVATIONS, LLC, Plaintiff, v. HULU, LLC, Defendant. Case No. LA CV17-04146 JAK (PLAx) DEFENDANT HULU, LLC’S NOTICE OF MOTION FOR SUMMARY JUDGMENT OF NO WILLFUL INFRINGEMENT Hon. Judge John A. Kronstadt HULU, LLC, Counter-Claimant, v. SOUND VIEW INNOVATIONS, LLC, Counter-Defendant. Date: April 15, 2019 Time: 8:30 a.m. Courtroom No.: 10B Discovery Cutoff: February 11, 2019 Trial Date: TBD REDACTED VERSION OF DOCUMENT PROPOSED TO BE FILED UNDER SEAL Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 1 of 29 Page ID #:15218 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - i - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) TO PLAINTIFF SOUND VIEW INNOVATIONS, LLC AND ITS ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on April 15, 2019, at 8:30 a.m., Defendants Hulu, LLC (“Hulu”) will bring for hearing its Motion For Summary Judgment of No Willful Infringement, before the Honorable John A. Kronstadt, in Courtroom 10B at First Street Courthouse, 350 W. First Street, Los Angeles, CA 90012. Hulu, by and through their undersigned counsel, hereby moves this Court pursuant to Fed. R. Civ. P. 56 for summary judgment that Hulu has not willfully infringed U.S. Patent Nos. 6,708,213 (“the ’213 Patent”); 6,757,796 (“the ’796 Patent”), and 9,462,074 (“the ’074 Patent”) under 35 U.S.C. § 284. This Motion is based on the attached memorandum of points and authorities, the Omnibus Declaration Of Cameron Westin and accompanying exhibits, the Declaration Of Michael Jeffords, the Statement Of Undisputed Facts (“SOF”), any matters of which this Court may take judicial notice, and such additional evidence or argument as may be presented at or before the hearing on this matter. This Motion is made following a conference of counsel pursuant to Local Rule 7-3 on February 25, 2019. Dated: March 4, 2019 Respectfully submitted, O’MELVENY & MYERS LLP BRETT J. WILLIAMSON JOHN C. KAPPOS CAMERON W. WESTIN BO K. MOON BRADLEY M. BERG By /s/ Brett J. Williamson Attorneys for Defendant and Counter-Claimant HULU, LLC Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 2 of 29 Page ID #:15219 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY -ii- DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) TABLE OF CONTENTS Page I. INTRODUCTION ........................................................................................... 1 II. FACTUAL BACKGROUND ......................................................................... 2 A. The Parties ............................................................................................. 2 B. Pre-Suit Actions of Hulu and Sound View ........................................... 3 C. Litigation Positions of Hulu and Sound View ...................................... 8 D. Sound View’s Allegations of Willful Infringement ........................... 10 III. LEGAL STANDARD ................................................................................... 12 IV. ARGUMENT ................................................................................................ 17 A. No Reasonable Juror Could Conclude that Hulu’s Actions Constitute Egregious Misconduct ....................................................... 17 1. Sound View’s Pre-Suit Identification of the CDN Patents Is Not Sufficient Evidence To Support Its Claim of Willful Infringement ................................................................. 18 2. Hulu’s Continuation of Its Business and the Lack of Ongoing Licensing Discussions Are Not Sufficient Evidence To Support Willful Infringement .............................. 20 3. No Fact Witness Deposition Testimony Supports Willful Infringement ............................................................................. 21 4. Hulu’s Advice of Counsel Disclosures Do Not Create a Factual Dispute Precluding Summary Judgment ..................... 22 5. Dr. Richardson’s Opinions on “Willful Infringement” Are Unqualified Legal Conclusions That Do Not Preclude Summary Judgment .................................................................. 23 V. CONCLUSION ............................................................................................. 23 Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 3 of 29 Page ID #:15220 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - iii - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) TABLE OF AUTHORITIES Page CASES Ansell Healthcare Prod. LLC v. Reckitt Benckiser LLC, 2018 WL 620968 (D. Del. Jan. 30, 2018) .......................................................... 18 Blackberry Ltd. v. Facebook, Inc., 2018 WL 4847053 (C.D. Cal. Aug. 21, 2018) ............................................. 15, 21 Braun Inc. v. Dynamics Corp. of Am., 975 F.2d 815 (Fed. Cir. 1992) ............................................................................ 17 Broadcom Corp. v. Qualcomm, Inc., 543 F.3d 683 (Fed. Cir. 2008) ............................................................................ 16 Celotex Corp. v. Catrett, 477 U.S. 317 (1986) ........................................................................................... 12 CG Tech. Dev., LLC v. Big Fish Games, Inc., 2016 WL 4521682 (D. Nev. Aug. 29, 2016) ...................................................... 16 Continental Circuits LLC v. Intel Corp., 2017 WL 679116 (D. Ariz. Feb. 21, 2017) ........................................................ 17 Document Sec. Sys., Inc. v. Lite-On, Inc., 2018 WL 2422589 (C.D. Cal. Feb. 5, 2018) .......................................... 14, 15, 18 Erfindergemeinschaft UroPep GbR v. Eli Lilly & Co., 2017 WL 2190055 (E.D. Tex. May 18, 2017) ................................................... 14 Greatbatch Ltd. v. AVX Corp., 2016 WL 7217625 (D. Del. Dec. 13, 2016) ....................................................... 14 Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016) ................................................................................ passim Intellectual Ventures I, LLC v. Symantec Corp., 234 F. Supp. 3d 601 (D. Del. Feb. 13, 2017) ............................................... 13, 15 Koninklijke Philips N.V. v. Zoll Med. Corp., 257 F. Supp. 3d 159 (D. Mass. June 26, 2017) ............................................ 13, 15 LoggerHead Tools, LLC v. Sears Holdings Corp., 2016 WL 5112017 (N.D. Ill. Sept. 20, 2016) ......................................... 14, 17, 22 Masimo Corp. v. Philips Elecs. N. Am. Corp., 2016 WL 6542726 (D. Del. Oct. 31, 2016) ........................................................ 13 Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 (1986) ........................................................................................... 12 Move, Inc. v. Real Estate All. Ltd., 221 F. Supp. 3d 1149 (C. D. Cal. Dec. 1, 2016) .......................................... 13, 15 Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 4 of 29 Page ID #:15221 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY -iv- DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) Plastic Omnium Advanced Innovation and Research v. Donghee Am., Inc., 2018 WL 2316637 (D. Del. May 22, 2018) ....................................................... 16 SRI Int’l v. Matsushita Elec. Corp. of America, 775 F.2d 1107 (Fed. Cir. 1985) .......................................................................... 12 Stickle v. Heublein, Inc., 716 F.2d 1550 (Fed. Cir. 1983) .......................................................................... 16 Vehicle IP, LLC v. AT&T Mobility LLC, 227 F. Supp. 3d 319 (D. Del. Dec. 30, 2016) ............................................... 16, 21 Visteon Glob. Techs., Inc. v. Garmin Int’l, Inc., 2016 WL 4396085 (E.D. Mich. Aug. 18, 2016) ................................................ 16 Wisconsin Alumni Research Found. v. Apple, Inc., 261 F. Supp. 3d 900 (W.D. Wis. Jun. 6, 2017), rev’d in part on other grounds, 905 F.3d 1341 (Fed. Cir. 2018) ........................................... 15, 20 XpertUniverse, Inc. v. Cisco Sys., Inc., 2017 WL 4551519 (N.D. Cal. Oct. 11, 2017) .................................................... 15 RULES Fed. R. Civ. P. 56(c) ................................................................................................ 11 Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 5 of 29 Page ID #:15222 Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 6 of 29 Page ID #:15223 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 2 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) Pulse Elecs., Inc., 136 S. Ct. 1923, 1932 (2016) (emphasis added). The Court should not permit Sound View to proceed to trial with this threat of treble damages in a case that amounts to nothing more than typical allegations of patent infringement. Indeed, here, the facts demonstrate that Hulu did not and could not have had the requisite mental state for a finding of willful infringement under the relevant law. Summary judgment of no willful infringement is appropriate. II. FACTUAL BACKGROUND A. The Parties Hulu, formed on June 11, 2007, has headquarters in Santa Monica, California. Hulu delivers streaming video over the Internet. Since its initial release to the public in March of 2008, Hulu has offered subscription video-on-demand (“SVOD”) services, providing on-demand content from its content partners. In May of 2017, Hulu launched its Hulu Live service offering subscribers access to the same TV channels offered through traditional cable providers, delivered through Hulu’s streaming platform. Declaration of Michael J. Jeffords, Ex. A (“Jeffords Rpt.”) at 6-7. In addition to offering content from content partners, Hulu also develops its own content, such as The Handmaid’s Tale and The Looming Tower. See Omnibus Declaration of Cameron W. Westin (“Westin Decl.”), Ex. 1 (https://www.hulu.com/press/about/). Sound View describes itself as “an intellectual property licensing company.” Dkt. No. 40 at ¶ 1. Sound View does not sell any products or conduct any research or development. Westin Decl., Ex. 2 at 34:14-17 and 38:9-12. Sound View’s only assets are a set of patents that it purchased from Alcatel Lucent in two separate agreements in 2013 and 2014. Id. at 33:24-34:8. John Desmarais, is also the founder and namesake of the law firm that serves as plaintiff’s counsel in all of Sound View’s litigation, including this case. See id. at 24:8-18 and Westin Decl., Ex. 3. Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 7 of 29 Page ID #:15224 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 3 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) Jeffords Rept. at 60-62. These companies include content delivery network (“CDN”) services Akamai Technologies, Inc., and Level 3 Communications, Inc., Westin Decl., Exs. 4, 5. As discussed further below, Sound View now accuses Hulu’s use of the CDN services provided by these same two companies of infringing the three CDN Patents. and Sound View has not pursued litigation against either one. Ex. 2 at 338:20-339:8; 352:24- 355:4. Since its formation in 2013, Sound View has filed eleven cases alleging infringement by various companies, including this one. Sound View has alleged willful infringement by every defendant in every case. Westin Decl., Ex. 6 ¶ 29 (“Facebook continues to willfully infringe Sound View’s patents so as to obtain their significant benefits without paying any compensation to Sound View.”); Ex. 7 ¶ 30 (same with regard to LinkedIn); Ex. 8 ¶ 29 (same with regard to Twitter); Ex. 9 ¶ 18 (same with regard with Facebook (again)); Ex. 10 ¶ 36 (same with regard to Fidelity and FMR LLC); Ex. 11 ¶ 37 (same with regard to the CW Network); Ex. 12 ¶ 83 (same with regard to CBS Corp., CBS Interactive, Showtime Networks, Showtime Digital Inc., CBS Sports Inc., and CBS News Inc.); Ex. 13 ¶ 65 (same with regard to AMC Networks, AMC Premiere, We TV, Shudder LLC, SundanceTV LLC, Digital Store LLC, IFC In Theaters LLC, and IFC TV LLC); Ex. 14 ¶ 54 (same with regard to QVC, Inc.); Ex. 15 ¶ 61 (same with regard to HSN, Inc.). B. Pre-Suit Actions of Hulu and Sound View Sound View did not approach Hulu about taking a license to its portfolio until October 10, 2016, when Gerard deBlasi, Sound View’s CEO and President, sent Hulu a letter in the same style that Sound View had sent Westin Decl., Ex. 16 at 219, Ex. 17 at SVI- Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 8 of 29 Page ID #:15225 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 4 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) HULU00013732-13734, Ex. 18 Sound View has not contended, and there is no evidence to suggest, that Hulu was aware of any of the asserted patents before Sound View’s October 10, 2016 letter. Ex. 16 at 219. Sound View’s October 2016 letter stated that Sound View “owns over 900 active and pending worldwide patents,” including “approximately 500 U.S. patents.” Ex. 17 at SVI-HULU00013732. Sound View’s letter stated its view that Hulu “uses functionality covered by various Sound View patents,” and that it infringed those patents “either directly and/or indirectly.” Id. The October 2016 letter listed two of the three patents that are the subject of the present motion (the ’213 and ’796 Patents), along with eight other patents. Id. at SVI-HULU00013734. The October 2016 letter did not mention the ’074 Patent. Id. In its October 2016 letter, Sound View stated its “intention to allow Hulu to continue to use the inventions covered by the patents” identified in its letter, and invited Hulu to conduct discussions regarding a license to Sound View’s entire patent portfolio. Id. at SVI-HULU00013733. On March 28, 2017, Sound View sent another letter stating that it had “continued to review” its portfolio. Id. at SVI-HULU00013730. Sound View’s March 2017 letter was the first time it identified the ’074 Patent. In this March 2017 letter, Sound View also for the first time stated that it had “charted several of these patents against Hulu’s video streaming service.” Id. On April 6, 2017, Hulu’s in-house counsel responded, explaining that she was traveling overseas but that she “plan[ned] to investigate [Sound View’s] patent infringement allegations” upon her return. Westin Decl., Ex. 19. In the meantime, Hulu requested that Sound View provide more information about Sound View’s allegations. Id. Westin Decl., Ex. 20 at 110:11-16. Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 9 of 29 Page ID #:15226 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 5 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) provided detailed written letters providing his firm’s opinion that Hulu did not infringe any claims of the ’213, ’796, or ’074 Patents. Westin Decl., Exs. 21, 22, 23. On May 22, 2017, Sound View responded to Hulu’s letter. Westin Decl., Ex. 24. Sound View’s May 22, 2017 letter stated that it was providing twelve different claim charts. In addition, Sound View provided a new basis for contending that Hulu infringed the three “helper server” patents that are the subject of this motion— alleging that Hulu directs and controls activities performed by its CDN partners, including Akamai and Level 3: Specifically, as described in the attached charts, Hulu and/or its agents and contractors - including Akamai Technologies, Inc., Level 3 Communications, Inc., and Limelight Networks, Inc. (“CDNs”) - practice each limitation of the exemplary claims of Sound View’s patents. At a minimum, Hulu directly infringes and induces infringement of Sound View’s patents by contracting for the performance of services by the CDNs with the knowledge that those services constitute infringement of Sound View’s patents. Id. at SVI-HULU00013812. Sound View’s May 22, 2017 letter also identified new and different accused technology than its earlier letters for all three of the CDN Patents. For example, Sound View’s October 2016 identification of technology that allegedly infringed the ’213 Patent, versus its May 2017 identification of technology that allegedly infringed the same patent, is shown below: Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 10 of 29 Page ID #:15227 Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 11 of 29 Page ID #:15228 Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 12 of 29 Page ID #:15229 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 8 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) C. Litigation Positions of Hulu and Sound View Throughout this litigation, Hulu has maintained that it does not infringe Sound View’s patents. Hulu retained separate litigation counsel shortly after Sound View filed the case. Dkt. Nos. 30-33. Approximately one month after Sound View filed its lawsuit, Hulu received the Walker Stevens firm’s letters providing that firm’s opinions why Hulu did not infringe any of the asserted patents, including the ’213, ’796, and ’074 Patents. Exs. 21, 22, 23. Hulu responded to Sound View’s Complaint by filing a motion to dismiss four of the asserted patents (including the ’074 Patent) as directed to unpatentable subject matter. Dkt. No. 36. Hulu also responded to interrogatories from Sound View, identifying limitations in Sound View’s patents that Hulu contends are not present in Hulu’s accused services. Westin Decl., Ex. 25 at 8-24. Despite Sound View initially alleging that Hulu’s infringement of U.S. Patent No. 6,502,133 was also “deliberate and willful,” Sound View stipulated to dismiss its claims under that patent on February 8, 2018. Dkt. No. 59 at 1.8 After the Court denied Hulu’s motion to dismiss under § 101 as premature, Dkt. No. 83, Hulu filed its Answer to Sound View’s First Amended Complaint on April 25, 2018. Hulu’s answer pled, among other defenses, that “Hulu has not engaged in any acts that would constitute direct or indirect infringement of any valid claim of the Asserted Patents, either literally or under the doctrine of equivalents, willfully or otherwise,” and that “[t]o the extent Sound View accuses activities performed by entities other than Hulu, those activities are not attributable to Hulu, as Hulu does not direct or control those activities and those activities are not part of a joint enterprise.” Dkt. No. 85 at ¶¶ 205, 206. 8 Sound View dismissed its allegations under this patent after Hulu served an interrogatory asking Sound View to “[d]escribe in detail all bases for Your contention that Hulu utilizes” the technology that Sound View alleged to infringe that patent in its infringement contentions, “including all investigation and analysis you did prior to filing this Action.” Ex. 26 at 10. Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 13 of 29 Page ID #:15230 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 9 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) Hulu also filed petitions for inter partes review (“IPR”) challenging the validity of the ’213 and ’074 Patents in view of prior art. See Dkt. No. 152. The ’074 petition was instituted by the U.S. Patent and Trademark Office’s Patent Trials and Appeals Board (“PTAB”) after the PTAB found there was a reasonable likelihood that the claims were invalid in view of prior art. Id. During discovery, Sound View conducted multiple depositions of witnesses from Hulu’s two CDNs—Akamai and Level 3—whose activities form the basis of an allegation that Hulu directly infringes and induces infringement. Westin Decl., Exs. 27, 28 (subpoenas to Akamai and Level) and Exs. 30, 40 (transcripts of Akamai and Level 3 witnesses). Sound View characterized this discovery as crucial to substantiating its allegations of infringement when asking the Court not to stay the case while the PTAB considered Hulu’s IPR petitions: [A] stay would unduly prejudice Sound View because its infringement claims have required, and may still require, substantial third party discovery. Sound View alleges that Hulu infringes at least through its control and direction of third-party content delivery networks, or “CDNs.” Although Sound View has diligently begun taking depositions of witnesses from the third-party CDNs and requested document production, additional discovery must continue with regard to the CDNs. Dkt. No. 124 at 22 (emphasis added and internal citations omitted). On August 3, 2018, Sound View served its opening expert reports on the issues of infringement and damages. Dkt. No. 95 at 1. On August 31, 2018, Hulu served responsive expert reports, in which Hulu’s experts rebutted the opinions of Sound View’s experts and offered their own opinions that Hulu did not infringe any of the asserted claims. Dkt. No. 95 at 2. Both parties’ technical expert reports rely heavily upon testimony from the CDNs’ fact witnesses. See, e.g., Westin Decl., Ex. 29 at 171-181, Declaration of Dr. Jeffrey S. Chase, Ex. A (“Chase Rebuttal Report”) at 51-63. Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 14 of 29 Page ID #:15231 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 10 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) On September 5, 2018, the Court issued its order construing six terms from the CDN Patents, largely adopting construction proposed by Hulu (and rejecting those proposed by Sound View) for five of the six terms. Dkt. No. 148 at 13-25. Sound View subsequently filed a motion for leave to supplement its expert reports to address these constructions. Dkt. No. 163. On December 18, 2018, Sound View served the supplemental expert report of Dr. Iain Richardson, its technical expert opining on infringement of the ’213, ’796, and ’074 Patents. Dkt. No. 224 at 2. On January 15, 2019, Hulu served the supplemental report of Dr. Jeffrey Chase, rebutting Dr. Richardson’s supplemental opinions. Dkt. No. 232 at 2. Hulu has (concurrently with this motion) moved for summary judgment that no reasonable fact finder could conclude that it infringes any of the CDN Patents.9 Sound View, on the other hand, has not sought summary judgment of infringement on any of the patents-in-suit. D. Sound View’s Allegations of Willful Infringement Sound View’s threadbare allegations of willful infringement do not allege any particular activity that rises to the level of egregious conduct. Hulu’s Interrogatory No. 10 asks Sound View, in part, to “[d]escribe in detail all bases for Your prayer for an award of damages,” including “that You should be awarded enhanced damages pursuant to 35 U.S.C. § 284.” Ex. 16 at 218. Sound View’s response identifies the following bases for its claims of willful infringement: 1. Knowledge of patents and continued use of products. Sound View contends that Hulu “has had knowledge of and notice of its infringement of the ’371, ’213, ’796, and ’074 patents since before this action was first filed, yet has continued to make, use, sell, offer for sale 9 See Defendant Hulu, LLC’s Notice of Motion for Summary Judgment of Non- infringement of U.S. Patent Nos. 6,708,213, 6,757,796, and 9,462,074 and Memorandum in Support (filed concurrently herewith). Of course, if the Court grants that motion the present motion will be rendered moot. Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 15 of 29 Page ID #:15232 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 11 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) and/or import the infringing products and methods, and has continued to create and disseminate promotional and marketing materials, supporting materials, instructions, product manuals, and/or technical information relating to the infringing products and methods, with no good-faith justification for doing so.” Ex. 16 at 219. This pre-suit “knowledge” is based on Sound View’s two letters and the claim charts provided on May 22, 2017. Id. 2. Lack of Ongoing Licensing Discussions. Sound View also contends that Hulu “has refused to engage in any meaningful discussion about reaching a licensing agreement to end its infringement of Sound View’s patents-in-suit.” Id. at 220. 3. Entire Deposition Transcripts. Sound View’s response identifies the entire deposition transcripts, and accompanying exhibits, of seven different fact witnesses, four of which have never worked for Hulu. Id. at 220-221. 4. Hulu’s Advice of Counsel. Sound View also contends that “evidence,” including entire deposition transcripts and unspecified “discovery responses,” “demonstrates that Hulu did not reasonably rely on and/or develop a good faith basis of non-infringement based on” the opinions provided by the Walker Stevens firm. Id. at 221. 5. Sound View’s Expert Reports. Sound View also incorporates, without any further specificity, the reports of its experts on technical and damages issues, including Mr. David Yurkerwich (a damages expert who offers no opinion on willful infringement or egregiousness), Dr. Sigurd Meldal (a technical expert who opines on only the ’062 Patent for which there is no allegation of willful infringement), and Dr. Iain Richardson (a technical expert for the three CDN patents). Id. at 220. Dr. Richardson’s report on alleged Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 16 of 29 Page ID #:15233 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 12 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) infringement of the three CDN Patents contains largely redundant sections stating his opinion that Hulu’s infringement of the ’213, ’796, and ’074 Patents, in his conclusory opinion, “has been and continues to be willful, as Hulu knew or should have known that its actions constituted an unjustifiably high risk of infringement of a valid patent.” Ex. 29 (excerpts of Richardson Report) at ¶¶ 427-438, 583- 594, 832-843. Dr. Richardson’s report largely repeats grounds found in Sound View’s interrogatory responses, including Hulu’s pre-suit knowledge of the patents, continued use of the allegedly infringing technology, and the fact that Hulu had not agreed to take a license to Sound View’s portfolio. Id. at ¶¶ 427-430, 583-586, 832-835. The report thereafter identifies grounds that are largely redundant of those he cites merely for the fact that Hulu allegedly infringes, such as Hulu’s contracts with the CDN providers Akamai and Level 3, the use of MPEG-DASH and/or HLS data, and user portals provided by Akamai and Level 3. Id. at ¶¶ 431-438, 587-594, 835-843. At no point does Dr. Richardson address the Halo standard of “egregiousness” or identify any conduct that he believes would meet the Supreme Court’s standard for willful infringement. III. LEGAL STANDARD Summary judgment is appropriate where, as here, there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party has the initial burden of demonstrating the absence of any genuine dispute of material fact. SRI Int’l v. Matsushita Elec. Corp. of America, 775 F.2d 1107, 1116 (Fed. Cir. 1985). To defeat a well-founded summary judgment motion, the nonmoving party must set forth “specific facts showing that there is a genuine issue Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 17 of 29 Page ID #:15234 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 13 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) for trial.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (emphasis in original). Sound View bears the burden of establishing willful infringement under 35 U.S.C. § 284 by a preponderance of the evidence. In 2016, the Supreme Court held that this burden requires a plaintiff to show that an accused infringer has engaged in acts of “egregious infringement,” such as “willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a pirate.” Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1932 (2016) (emphasis added). In formulating this standard, the Halo Court focused on “the most culpable offenders, such as the ‘wanton and malicious pirate’ who intentionally infringes another's patent—with no doubts about its validity or any notion of a defense—for no purpose other than to steal the patentee’s business.” Id. (emphasis added) (citation omitted). The threat of enhanced damages under § 284 was “designed as a ‘punitive’ or ‘vindictive’ sanction for egregious infringement behavior.” Id. By contrast, the Supreme Court made clear that enhanced damages under § 284 “are not to be meted out in a typical infringement case.” Id. (emphasis added). District courts across the country, and in this district, have applied this “egregiousness” standard and granted summary judgment against plaintiffs’ attempts to maintain willful infringement claims in such “typical infringement” cases. For example, in Move, Inc. v. Real Estate All. Ltd., 221 F. Supp. 3d 1149 (C.D. Cal. Dec. 1, 2016), the plaintiff contended that willful infringement could be found based on the fact that defendant’s “continued to use the allegedly infringing method after it learned of [plaintiff’s] patents.” Id. at 1173. The Court found that the defendant, however, “had several reasonable arguments as to why its conduct was non-infringing.” Id. Because there was “no evidence that [defendant] engaged in any ‘misconduct beyond typical infringement,’” the Court concluded “[t]his is not an egregious case,” and granted summary judgment of no willful infringement. Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 18 of 29 Page ID #:15235 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 14 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) Id. (emphasis added).10 District courts applying Halo’s standard of “egregiousness” have identified examples of such “typical infringement” cases where the alleged infringer’s supposedly “willful” conduct falls short of what any reasonable fact finder could find constitutes willful infringement. For example, a defendant merely having pre- suit knowledge of an asserted patent does not support a finding of “egregious infringement.” Document Sec. Sys., Inc. v. Lite-On, Inc., 2018 WL 2422589, at *2 (C.D. Cal. Feb. 5, 2018) (dismissing allegations of willful infringement and “join[ing] the majority of district courts in the Ninth Circuit in finding that allegations of knowledge alone are not sufficient to state a claim for willful infringement.”) Rather, “[t]he key inquiry” for willful infringement is “whether there is evidence in addition to [an alleged infringer’s] pre-suit knowledge of the patents” demonstrating conduct rising to the “egregious” level warranting the Court to “impose the ‘punitive’ sanction of enhanced damages.” Greatbatch Ltd. v. AVX Corp., 2016 WL 7217625, at *3 (D. Del. Dec. 13, 2016) (quoting Halo, 132 S. Ct. 10 See also, e.g., Koninklijke Philips N.V. v. Zoll Med. Corp., 257 F. Supp. 3d 159, 163 (D. Mass. June 26, 2017) (granting summary judgment where “Plaintiffs have not met their burden to show that defendant’s conduct was so malicious that a finding of willful infringement is warranted in this case.”); Intellectual Ventures I, LLC v. Symantec Corp., 234 F. Supp. 3d 601, 611-12 (D. Del. Feb. 13, 2017) (granting summary judgment of no willful infringement because the plaintiff “identifie[d] no evidence of behavior beyond typical infringement,” and thus “[n]o reasonable jury could find willful infringement.”); Masimo Corp. v. Philips Elecs. N. Am. Corp., 2016 WL 6542726, at *16 (D. Del. Oct. 31, 2016) (granting summary judgment where plaintiff had not “presented any evidence to support a finding that Philips’ conduct was ‘willful, wanton, malicious, [or in] bad faith,’” such that no “reasonable factfinder could not find that Philips subjectively intended to infringe the ’400 patent.”); LoggerHead Tools, LLC v. Sears Holdings Corp., 2016 WL 5112017, at *4 (N.D. Ill. Sept. 20, 2016) (granting summary judgment of no willful infringement where “Plaintiff has not presented any facts showing that Defendants’ conduct was ‘willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a pirate.”);. Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 19 of 29 Page ID #:15236 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 15 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) at 1932) (emphasis in original); Erfindergemeinschaft UroPep GbR v. Eli Lilly & Co., 2017 WL 2190055, at *3 (E.D. Tex. May 18, 2017) (same). While evidence of copying the patents or relying on it can be evidence of egregious misconduct, the absence of any evidence of copying—particularly when the accused products were developed well before any allegation that the alleged infringer was aware of the patents—supports a finding of no willful infringement. For example, in Wisconsin Alumni Research Found. v. Apple, Inc., the district court held that a plaintiff had failed to establish willful infringement where the plaintiff’s allegations of knowledge were based on “the two months period before the filing of this lawsuit,” and the defendant “had already designed, manufactured and begun to sell phones containing the infringing processor” before learning of the patents. 261 F. Supp. 3d 900, 918 (W.D. Wis. Jun. 6, 2017), rev’d in part on other grounds, 905 F.3d 1341 (Fed. Cir. 2018). The court found there was “no evidence of copying or other egregious misconduct that would warrant a finding of willful infringement.” Id. (emphasis added). Similarly, mere disagreements about whether the asserted patents are infringed do not constitute “egregious infringement.” “Post–Halo, courts have dismissed willful[] infringement claims where, as here, the defendant has had ‘reasonable arguments as to why its conduct was non-infringing.’” Koninklijke Philips, 257 F. Supp. 3d at 163 (quoting Move, Inc., 221 F. Supp. 3d at 1173). A defendant’s continued use of an infringing product in the face of infringement allegations, even after the defendant had “declined to license [the] patents after discussions” with the plaintiff, is also not egregious misconduct. Blackberry Ltd. v. Facebook, Inc., 2018 WL 4847053, at *16 (C.D. Cal. Aug. 21, 2018) (dismissing willful infringement claims at the Rule 12 stage). For example, in Intellectual Ventures I, the district court granted summary judgment of no willful infringement despite the plaintiff’s allegations that the defendant had pre-suit knowledge of the patents in suit and “continued to update, produce, and sell [the Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 20 of 29 Page ID #:15237 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 16 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) accused products] even after this suit was filed.” 234 F. Supp. 3d 601, 611-12 (D. Del. 2017), aff’d, 725 F. App’x 976 (Fed. Cir. 2018). The plaintiff “identifie[d] no evidence of behavior beyond typical infringement,” and thus “[n]o reasonable jury could find willful infringement based on [plaintiff’s] evidence.” Id. See also Document Sec. Sys., 2018 WL 2422589 at *3 (plaintiff’s allegations of “knowledge and continued infringement” were “not sufficient to state a claim for willful infringement”); XpertUniverse, Inc. v. Cisco Sys., Inc., 2017 WL 4551519, at *6 (N.D. Cal. Oct. 11, 2017) (despite final judgment of infringement against another company with similar products, allegations of defendant’s “knowledge and continued infringement” were insufficient “to show that [defendant] has engaged in ‘egregious cases of misconduct beyond typical infringement’ that could possibly warrant enhanced damages”); CG Tech. Dev., LLC v. Big Fish Games, Inc., 2016 WL 4521682, at *14 (D. Nev. Aug. 29, 2016) (plaintiffs “fail[ed] to state a claim for willful infringement” by merely alleging defendant “was made aware of the patents [and] … continued use of its infringing products”). Evidence that a defendant intended to perform the acts alleged to infringe the patents is also insufficient to state a claim for willful infringement. Instead, the plaintiff must prove that the alleged infringer “acted with a specific intent to infringe” the patents-in-suit. Vehicle IP, LLC v. AT&T Mobility LLC, 227 F. Supp. 3d 319, 330 (D. Del. Dec. 30, 2016) (emphasis added). See also Stickle v. Heublein, Inc., 716 F.2d 1550, 1565 (Fed. Cir. 1983) (“[M]ore is necessary to support a finding of ‘willfulness’ than that the infringing acts were not inadvertent. The court must determine that the infringer acted in disregard of the patent, that is, that the infringer had no reasonable basis for believing it had a right to do the acts.”). A defendant’s decision not “to engage in a process to design around the patent” after learning of the patent is also not egregious infringement. Plastic Omnium Advanced Innovation and Research v. Donghee Am., Inc., 2018 WL Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 21 of 29 Page ID #:15238 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 17 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) 2316637, at *11 (D. Del. May 22, 2018) (granting summary judgment of no willful infringement). Finally, consultation with a patent lawyer regarding allegations of infringement can also negate allegations of willful infringement. While “‘there is no affirmative obligation to obtain opinion of counsel,’” Visteon Glob. Techs., Inc. v. Garmin Int’l, Inc., 2016 WL 4396085, at *5 (E.D. Mich. Aug. 18, 2016) (quoting Broadcom Corp. v. Qualcomm, Inc., 543 F.3d 683, 699 (Fed. Cir. 2008)), courts have found that “‘[o]n-going consultation with a patent lawyer is highly probative evidence of good faith’” on the issue of willful infringement. LoggerHead Tools, 2016 WL 5112017 at *4 (quoting Braun Inc. v. Dynamics Corp. of Am., 975 F.2d 815, 822 (Fed. Cir. 1992)) (emphasis added). At all times, “the touchstone of the willfulness inquiry” remains egregious conduct, not conduct found in the typical patent infringement case. Continental Circuits LLC v. Intel Corp., 2017 WL 679116, at *11 (D. Ariz. Feb. 21, 2017). IV. ARGUMENT A. No Reasonable Juror Could Conclude that Hulu’s Actions Constitute Egregious Misconduct The Court should not permit Sound View to maintain allegations of willful infringement based on evidence that unquestionably shows this is nothing more than a typical patent dispute. Sound View contends that Hulu infringes the three CDN Patents, an allegation that Hulu has disputed and continues to dispute. In an effort to substantiate its allegations under the CDN Patents, Sound View has conceded that it requires confidential technical information from third parties Akamai and Level 3, the CDNs whose services are alleged to actually infringe the patents, albeit under the purported “direction and control” of Hulu. While Hulu, in light of the evidence provided by these CDNs, has moved for summary judgment that no reasonable fact finder could conclude that it infringes any asserted claims of the CDN Patents, Sound View makes no similar motion for summary judgment of Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 22 of 29 Page ID #:15239 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 18 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) infringement. Far from the “egregious” misconduct envisioned by the Supreme Court in Halo, nothing identified by Sound View in its interrogatory responses, and no other evidence in this case, would allow a reasonable juror to conclude that Hulu’s conduct has been “willful, wanton, malicious bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a pirate.” Halo, 136 S. Ct. at 1932. 1. Sound View’s Pre-Suit Identification of the CDN Patents Is Not Sufficient Evidence To Support Its Claim of Willful Infringement Hulu became aware of the CDN Patents just months before this case began. Indeed, before sending its October 2016 letter to Hulu, identifying the ’213 and ’796 Patents for the first time, Sound View Jeffords Rept. at 60-62. Jeffords Report at 33 Sound View’s October 2016 letter, and its March 2017 letter first identifying the ’074 Patents, are wholly inadequate to allow a fact finder to conclude that Hulu committed any “egregious” misconduct. “[A] party’s pre-suit knowledge of the patent is not by itself sufficient to find ‘willful misconduct’ such that the Court can award enhanced damages. Rather, the patentee must identify evidence beyond pre- suit knowledge of the patent to show that the accused infringer's infringement is ‘egregious,’ ‘deliberate,’ or ‘wanton.’” Ansell Healthcare Prod. LLC v. Reckitt Benckiser LLC, 2018 WL 620968 at *6 (D. Del. Jan. 30, 2018) (citation omitted); see also Document Sec. Sys., Inc., 2018 WL 2422589 at *2 (“allegations of [pre- suit] knowledge alone are not sufficient to state a claim for willful infringement”). Moreover, far from making Hulu’s continued use of its CDNs’ services Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 23 of 29 Page ID #:15240 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 19 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) “egregious infringement,” these letters did little more than identify the CDN Patents (among a host of others) and provide a vague allegation against Hulu’s entire array of services. Sound View’s October 2016 letter stated that Hulu infringed the ’213 and ’796 Patents through “[a]ll Hulu products, services, and activities which stream video,” and “All Hulu live streaming broadcasts,” respectively. Ex. 17 at SVI- HULU00013734. It claimed that Hulu “uses functionality covered by various Sound View patents,” but claimed infringement was conducted “either directly or indirectly.” Id. at SVI-HULU00013732. Similarly, Sound View’s March 2017 letter stated that only Claim 9 of the ’074 Patent was infringed “by streaming video to Hulu and Hulu Plus customers via the Akamai Technologies content delivery network.” Id. at SVI-HULU00013730. Sound View did not provide the allegations of infringement it would make in its Complaint until a mere 11 days before filing its lawsuit. In its May 22, 2017 letter, Sound View stated for the first time its contention that the ’213, ’796, and ’074 Patents were infringed “by Hulu and/or its agents and contractors — including at least Akamai Technologies, Inc., Level 3 Communications, Inc. and Limelight Networks (“CDNs”).” Ex. 24 at SVI-HULU00013812 (emphasis added). Sound View then charged the ’213 Patent was infringed by “[a]ll Hulu products, services, and activities which stream video using adaptive bitrate streaming protocols, including but not limited to MPEG-DASH and/or HLS video streaming protocols,” and “[a]ll Hulu products, services and activities that include a server capable of downloading a portion of a requested streaming media to a requesting client while concurrently retrieving another portion of the requested streaming media from another server, and capable of adjusting a data transfer rate.” Id. at SVI-HULU00013813 (emphasis added). It alleged that the ‘796 Patent was infringed by “[a]ll Hulu products, services and activities that provide for live video streaming using adaptive bitrate streaming protocols, including but not limited to the MPEG-Dash and/or HLS streaming protocols.” Id. (emphasis added). And it Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 24 of 29 Page ID #:15241 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 20 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) alleged that the ’074 Patent was infringed by “[a]ll Hulu products, services and activities which stream video using adaptive bitrate streaming protocols, including but not limited to MPEG-DASH and/or HLS video streaming protocols,” and “[a]ll Hulu products, services and activities having a server capable of storing streaming media at the server by deleting a portion of a plurality of streaming media objects stored at the server.” Id. at SVI-HULU00013814 (emphasis added). Despite Hulu’s in-house counsel previously informing Sound View that Hulu intended to investigate Sound View’s allegations and substantively respond, Ex. 19, Sound View initiated the current lawsuit only 11 days later. Dkt. No. 1. Sound View did so despite holding ongoing discussions with the two CDN providers, who to this day refuse to take a license to Sound View’s patents. Ex. 2 at 338:20-339:8; 352:24-355:4. These shifting infringement theories on the part of Sound View demonstrate that even Sound View had not fully identified the functionality that it contended infringed the CDN Patents until shortly before it filed its lawsuit against Hulu. 2. Hulu’s Continuation of Its Business and the Lack of Ongoing Licensing Discussions Are Not Sufficient Evidence To Support Willful Infringement Sound View’s suggestion that Hulu “has refused to engage in any meaningful discussion about reaching a licensing agreement to end its infringement of Sound View’s patents-in-suit” is simply untrue. Ex. 16 at 220. Indeed, it is Sound View, not Hulu that refused to engage in meaningful licensing discussions before launching the present lawsuit. Hulu’s April 6, 2017 letter stated that Hulu “plan[ned] to investigate [Sound View’s] patent infringement allegations and prepare a substantive response.” Ex. 19. Sound View revealed its CDN-based allegations on May 22, 2017, while telling Hulu it was “open to reaching a licensing agreement.” Ex. 24 at SVI-HULU00013812. Yet Sound View sued Hulu just 11 days later. This is in contrast to Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 25 of 29 Page ID #:15242 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 21 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) yet never pursued through litigation, and is inconsistent with typical licensing negotiations conducted in good faith. See, e.g., Wisconsin Alumni Research Foundation, 2017 WL 2438832 at *10-*11 (granting JMOL of no willful infringement where accused infringer learned of patent two months before lawsuit was filed). Moreover, the lack of licensing discussions between the parties does not constitute evidence of willful infringement. It is not “egregious” for an alleged infringer to “decline[] to license [the plaintiff’s] patents after discussions.” Blackberry, 2018 WL 4847053, at *16 (dismissing willful infringement claims at the Rule 12 stage). Hulu’s continuing to sell the accused services (which constitute virtually the entirety of Hulu’s business) is not evidence of egregious misconduct, but instead a typical dispute over whether the CDN Patents are infringed. 3. No Fact Witness Deposition Testimony Supports Willful Infringement Sound View’s interrogatory responses do not identify what aspect of various fact witnesses’ deposition testimony it contends is evidence of egregious misconduct on the part of Hulu. Ex. 16 at 220. Notably, however, four of the seven fact witnesses identified in Sound View’s interrogatory responses have never worked at Hulu. Any evidence of egregiousness must be based on the “subjective willfulness of a patent infringer,” not third parties. Halo, 136 S. Ct. at 1933 (emphasis added). Indeed, three of the fact witnesses Sound View relies upon are employees of Akamai or Level 3, Hulu’s CDN providers. Even before it filed this lawsuit, Sound View has acknowledged that its allegations against Hulu under the CDN Patents are based on Hulu’s “contracting for the performance of services by the CDNs with the knowledge that those services constitute infringement of Sound View’s patents.” Ex. 24 at SVI-HULU00013812. Sound View served subpoenas for documents and testimony on both Level 3 and Akamai, and both parties have produced highly Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 26 of 29 Page ID #:15243 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 22 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) confidential documents and evidence in response. Sound View’s own concession that substantiating its allegations “required … substantial third party discovery” from these CDNs (Dkt. No. 124 at 22) (emphasis added), rather than discovery from Hulu, demonstrates that Hulu could not have “acted with a specific intent to infringe” the CDN Patents. Vehicle IP, 227 F. Supp. 3d at 330 (emphasis added). Hulu did not even know the details of methods used by the CDNs because those details were protected by the CDNs as confidential business information and not shared with customers. See, e.g., Westin Decl., Ex. 30 at 248:2-251:10. While Hulu believes that the confidential evidence produced by these CDNs has now confirmed that Hulu in fact does not infringe any of the CDN Patents, no reasonable juror could conclude that Hulu acted willfully with a specific intent to infringe them where Hulu lacked visibility into the details of the steps performed by its CDNs which form the basis of Sound View’s infringement contentions. 4. Hulu’s Advice of Counsel Disclosures Do Not Create a Factual Dispute Precluding Summary Judgment Hulu’s production of the letters it received from outside counsel after pre-suit consultation do not create any factual issue that precludes summary judgment of no willful infringement. Sound View’s interrogatory responses do not point to Hulu’s act of obtaining the letters as evidence of willful infringement. Rather, Sound View contends that Hulu somehow cannot rely on these opinion letters to negate willful infringement. Hulu was under no obligation to seek an opinion of counsel, but did so before Sound View filed the present action. Thus, Hulu’s consultation with its outside counsel on Sound View’s allegations is in fact “highly probative evidence of good faith,” LoggerHead Tools, 2016 WL 5112017 at *4, and at a minimum does not preclude summary judgment of no willful infringement when no other evidence of egregious conduct exists. As this motion demonstrates, Hulu certainly does not need to rely on these letters in order to demonstrate the absence of a fact dispute with respect to the willfulness claims. Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 27 of 29 Page ID #:15244 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 23 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) 5. Dr. Richardson’s Opinions on “Willful Infringement” Are Unqualified Legal Conclusions That Do Not Preclude Summary Judgment Hulu has separately moved to exclude Dr. Richardson’s opinions about purported “willful infringement” under Fed. R. Evid. 702(a), as Dr. Richardson is not qualified to render opinions on this legal conclusion, his opinions (as a technical expert) would not be helpful to the jury, and he offers no opinion as to whether any conduct on the part of Hulu meets the egregiousness standard laid out by the Supreme Court. Moreover, Dr. Richardson’s opinions do not raise any factual dispute that would preclude summary judgment on Sound View’s willful infringement claims. To the contrary, Dr. Richardson identifies activity Hulu conducted long before Sound View acquired its patents or contacted Hulu, such as contracting with CDNs, delivering content encoded in MPEG-DASH and HLS formats, and accessing user portals provided by Hulu’s CDNs. None of this constitutes evidence that could lead a reasonable juror to conclude that Hulu had acted egregiously. V. CONCLUSION This case presents nothing more than typical allegations of patent infringement. No evidence exists of any egregious conduct on the part of Hulu sufficient to allow Sound View to satisfy its burden to meet the Supreme Court’s standard for willful infringement. Accordingly, for the reasons stated herein, Hulu respectfully requests the Court grant summary judgment of no willful infringement. Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 28 of 29 Page ID #:15245 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HIGHLY CONFIDENTIAL - ATTORNEY’S EYES ONLY - 24 - DEFENDANT HULU LLC’S MSJ OF NO WILLFUL INFRINGEMENT CASE NO. LA CV17-04146 JAK (PLAx) Dated: March 4, 2019 O’MELVENY & MYERS LLP BRETT J. WILLIAMSON JOHN C. KAPPOS CAMERON W. WESTIN BO K. MOON BRADLEY M. BERG By: /s/ Brett J. Williamson Brett J. Williamson Attorneys for Defendant and Counterclaim-Plaintiff HULU, LLC Case 2:17-cv-04146-JAK-PLA Document 267 Filed 03/05/19 Page 29 of 29 Page ID #:15246